welcome to "worldwide exchange." i'm ross westgate. an election booth stops an italy rally. and this is in stark contrast to france. the results are being dubbed a political earthquake. armed men are surrounding many areas but they are asking

for peace. and thailand's king open divorcing the country ice military chief despite growing protest for the army. the credit in europe is strong according to the latest cfo council. speaking to this show, they say corporates are getting access to capital at attractive rates. >> you're watching "worldwide exchange," bringing you business news from around the globe. and a very good morning to you. we have election results from the eu parliamentary elections. a mixed bag with an increase in gains for the anti-eu, a constituent from italy where exit polls show renze shows them

pulling ahead. a surprising win for the new prime minister. that's why the ftse is up 2.3% today. we'll have the latest from milan in a few minutes. let's go there right now, in fact. claudia has the latest. a surprising result. >> reporter: absolutely. it was expected that renzi could win and beat the second largest party, but it ended up that the distance is almost 20 points. so 21% of votes goes to him while 40% is what the pdk came up with. both a historical victory for the party as well as for renzi facing national election. the young prime minister is 39 years old. that sort of took over in this party coup in the month of

february. and they have passed with flying colors, so to speak. there was a surprise with the gdp number last week that fell. and it was looking weaker for him in terms of the approval. he's spoke a lot about the ambitious economic and constitutional reforms he intended to make, but for some italians, they believe he has not moved forward on that. this victory legitimizes him to be where he is. and basically after a couple days of festivities, he's going to get down to work and actually move forward. so for this struggling economy with strong unemployment as you see how the market reacted, it is looking like things may actually finally be changing. so a time of tides turning, so to speak, here in italy. so this outcome that is such a clear victory is rare. and in italy a lot of times we get sort of a mixed picture, but here's there's really no question. the pd won in these elections.

and it will be interesting to see what he does, if he does step down as he said he might do if he does lose. and he did come in with less votes than expected. another party is being talked about a lot. the communist party came in weaker then a expected with 15% of the votes. the voter election was strong enough, so overall it looks as though this is an official people. ross? >> thank you for that, claudia. strong result there. some contrast in france. we'll get to that in a second with stephane. we have comments coming up from mary drugge. and up nation expectations weaken and broadbased asset purchases may be the right response. we'll get more reaction on that, but first, let's get over to stephane with the national front

party taking the top spot in the french eu election. what's the reaction there? >> reporter: well, the victory is not a big surprise. we knew that the pontiff and national authority would come in the first position based on the electric poll before the questions. however, the scale of the victory, the real surprise, the extreme right party got more than 25% of votes ahead of the conservative party and well ahead of the socialist party you're seeing there. in france according to a highly interactive survey, 38% of the voters wanted first to express their resection after socialist party in power. and that even 67% of the people who voted for the extreme right

canceled. and 25% of them say they made the right issue based on european issues. so it is a game for they are long and the chinese government before being a vote of rejection until european. >> we repeated yesterday evening that she's from europe. >> translator: our people demand one policy only. a policy with the french. they no longer want to be on the outside and obey the commissioner who was not confronted by universal frontage. >> they think this is a break for the political landscape. the second socialist blow for the communist party in two months. in march the form er independen

was in the country. the large est victory ever for e political party. >> quite a result there. thank you for that, stephane. there's also an eu vote in the u.k. you were skepticaled a a half without them. at a british conference, he held his success. >> i think the whole british country, the british won't tell sale for decades about it and we fought off the army and now it looks like we'll get a victory. >> more on the comments from mario drugge.

coming up, we are looking at the eurozone. there's a negative spot to lower expectations and credit, though we are not familiar, too if up nation asset is weaker, whatever you respond. you can't help brim the supplies of dollar weakness. the dollar/yep is 136.35 coming back from the high session, but we hit 136 this morning, the lowest we have been down to since february. joining us is michael gallagher. >> thank you for joining us. we'll talk about european elections then in that order. this is interesting, asset purchases may be the right response. are we going to get to a meeting where that may happen?

>> it's possible. i'll have to see if later in the year you look apgs measures. there's quite a revival of them. and ecb parliament becomes deanchored. there's no reason to play the tool now. his playing is reserve in the next few days, so i think that's what he's telling us. there will be red coats soon in june, which reaffirms what he said in the press conference. and at some point he'll mess the average, the abs market, jet channels, generally. >> he quickly brings ecb equipment. that's what the d.c. has a real

lending -- i think going into the june meetings will future the track els counter. >> i was going to say, is it about your moll et. >> yeah, i think the moll et will answer as was get to june 5th the ecb doesn't want to shift in the economic settlement. >> we are going to move three big pictures. they will cut rate and be worried about the drent of the one thing. i think we can we could see it a weaker or so. back and back and act in the world about the elections. >> very interesting sort of results. if you nenlly look at the european markets this morning.

equity is firmer and the feds are in. the bigger question is less austerity. there's a variety of reasons why it is doing well, but people are reading this like that means less austerity with more growth in europe. and that's good for us. >> it is interesting that the center of europe is in italy and germany. you look at the results. michael, more to come from you. of course, not just europe being in elections, ukraine is well. and the president-elect of ukraine says he wants to bring peace to stop the russian president vladimir putin. he said he wants the same outcome. >> caller: like i said, and i'm not kidding and what i want for ironic, is thieves and calming.

we want this country to develop -- not being ironic, it's a destination and we want to enjoy thieves order. we honor the country after with election with the newly-elect without of stay. >> that's in kiev with the election results. steve, what happens now? >> a lot of things happen now, ross, and it has to move quickly. one thing very important is we don't have to wait another three weeks to get a second-round runoff. it was necessary continuing the violence continuing in the hands of soldiers, primarily to the east of the country. so whoever was president, we'll

look at that to see him get the mandate. now we have a legitimate government in kiev that can deal with a multitude of issues. the economy is in tatters and is going to shrink at 5%. then double digit up nation and double-digit interest rates as well. and $35 billion with needs ore, how can it be at a crucial time separatists can take advantage of the next airport when the president said the first job he's going to do is to get to the mass as well. it just shows how little control kiev has over the animals. they are getting russia to the table to agree to some sort of a

pull-back in the escalation. here's what we go now next. last night at his victory party so to peek. perhaps making this a whiter discussion. >> the sanction is just the reason of how to put everything on the table. how to discuss and how to exchange physician. any country could violet the international organization and the security council of the nations demonstrate that russia

is in complete isolation because of crimea. and russia, ukraine and the global economy pay a huge price for the crimea. and we should stop them and not be so emotional. it's an enormous challenge and is going to need all parties to push this forward. it cost me a new mayor of clench. it's been going on a few moments ago. what about sanctions, there's a lot of hawks in washington. and here in kiev, we want a third round of sanctions, to am lut pressure on the table forces it to the -- there's no doubt about it, when putin said to jeff on friday there's a boomerang on the west. ed the suffer will shrinked from

the inside house yd. >> that's absolutely crucial, but this country and russia, again, better prosperity in europe as well. i'm very important to see. it's important to see how russia and the ukraine speak well. much more to come from you. you can get more on the chocolate king president-elect. more to come on the elections and on today's show, sou souls -- amazon is now funding many places in the eu's tiny hax haven. out of europe, out of favor. find out how much mass united brand dropped after just one disappointing season. plus, a member of the kapg

of gentleman man -- that and more still to come.

hello. and welcome back to "worldwide exchange." european equities are high. we'll show you where we stand. this is the tax at all-time highs. and the single stock in dax that is in negative territory. we have holidays today for the u.k. and united states, so we can't show you the map. but we'll show you u.s. futures later. but nevertheless we are responding to comments from mary drugge. a very strong showing for the centrist party in germany up.80%. stephane saying this is a shock in paris. the ftse is very strongly up 2 1/3. and russia is up 1.8%. and matteo renzi triumphing in

the elections and we have also seen it complete its 500 million on friday. so another 200 meters at the outlet's group fitting stations. and the two corporates can increase over predominantly leather. so as his comments back, this morning it says it will hold on to his seats until 2016. then it hopes to get a more favorable price according you took a 17% equity stake out as a hold over the shares, but it is not for really rally. puttish or company looking to g get. distribute these to shareholders in the form of a dividend

according to reports that the monthly report is this wednesday. as far as bond rates are concerned, we'll show you peripheral space this morning. ten-yearal longs coming back lower to the 3% spanish. we saw this yield spike up on the ten-year yield. 1.2% is the yield there. and the german is extremely low. we hit 136.15 and bounced off that at the moment. $136.30. that is not that is one of the rates from last week. mr. sarto is talking about risks

to the down side to make people worry if the bank of japan will hear its targets for up nation over the course of the year. let's get more on what's happening in the asia scene. sri is with us, hi, sri. >> reporter: hi, ross, you were talking about the political tail risks of our own in the thai story is that they are revered a tight game. he has given his formal endorsemen endorsements. so this does suggest that the military is tight anything its group on ty life. and the market is down at the lows of the day, but i was talking to a brokerage earlier today to the of cambridge that the mid-calfs are performing relatively well. we are seeing a lot of foreign

on some of the people coming out to talk about that tomorrow. we'll wait and see. and form, we are one of the outperformers today. remember, the other drug, moodi, will be sworn in today. and the pro, the best test for the markets and him and his cabinet come early june to july. that's when he released the big budget. they launched and dialed to the weakness. there's also spoke. >> sri, thank you a little bit letter.

>> there news to come into the area. and there's talk about inflationery. he's concerned about a negative sparrow to take hold between low up nation, falling expectations and credit. and also in his speech he's saying that there are two areas which call for a policy decision that is a, the high jury's change which by the definition is importing also, credit is concerned by tyler.

they may act on the conventional inference. we may see another cut in interest rates and they may do something to ease the credit conditions. which mike comes from a talented ce oh, or potential assets in buying program, but analysts are not thinking that this is happening as soon as the next governing comes. for the meeting, what happened to seeing the beautiful spot -- if you are reading through the agenda, it is about up nation and rock. also to read the docket of . the ecb should have a higher target rate to around 4% to give it more room for maneuver before

4:40 into a deflation in their environment. there are others two find with the two skt hargt who was speaking yesterday and even wanted to have a proum. this is a direct fan, linked to the ecb who was concentrated on the prize. well, such as the unemployment rate. it will be a fruitful discussion here to bring you all that from here later on during the show. with that, back to you. we'll look at the bank of japan minutes among other things. and it's game on for sonia. lit make a deal to break. we needed 30 new hires for our call center.

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headlines from around the globe, an election boosts a rally for italian stocks. this is in contrast to france where it is being dubbed a political earthquake. armed men seized the airport

just hours after the polls closed in ukraine. ukraine's president is looking to bring peace to the nation. >> nobody and nothing can stop us. and thailand's king endorses the country's military chief despite growing protest against the army. and a round-up of activists since can tar. and speaking to this show, the cfo says they are gaping access to capital at excessive rates. we are an hour and a half into the trading day in europe. the u.k. and the united states are off today due to a holiday, so there's plenty to look at in terms of the european election results. this is off a fresh all-time high.

the cac is a leg higher after its results in the european or biggest chunk of votes. and the ftse came out very strongly. as far as bond rates are concerned, you can see yields in spain are lower down to 3% for italy. a little higher in france up to 1.83. and the euro/dollar is down to 1.3635. the dollar/yen is around the 102 mark after two-and-a-half week highs after plummeting 180 last week. so the president-elect of ukraine parashenko wants to bring peace. he was the emphatic winner this week in the presidential elections easily beating his

rival tumashenko. poroshenko made no promises to end the war but he should work on building a working relationship with vladimir putin. steve has been speaking to poroshenko, and steve, perhaps no coincidence as he gets announced as the president-elect. there are people taking over the airport in danesk. >> reporter: yes, it's no koups dense whatsoever. he said, i'm going to speak to the people and try to talk to them and explain what kiev isn't as well. and the separatists knew that and took over the airplane. i said, how can that happen when you knew this was a target and that they would go for the apple at the time? he said, that's incredible.

the number of problems that this man faced. i found a piece on the web, the $64,000 questions for mr. poroshenko. the economy is going to decline 5% of gdp this year with double-digit up nation and $35 billion of refinance needs over the last couple of years. >> reporter: the relationship with russia and persuading the euro he's in a new position and a new man to take the country forward with epidemic. from the top to the bottom, a whole host of these. we spoke to him last night after what looks like a convincing win, even though we don't have the official results. i said, what is your biggest

deal? >> now today just starting from today we have a legitimate result. more than 60% of the youukraini people stood for hours in line for their future. this is the most free and fair election for our people. they are very responsible and want to keep the country together. and because of that, ukraine now has a legitimate president. the yukranian president is very strong, but because of that we have solidarity with the whole world, which we do not aggress with russian aggression. so i have all the possibilities to launch the directive without

cheese. >> for your understanding, this is not a question of the bilateral between russia and crimea. after crimea we hope that will bring us to architecture that was ruined or destroyed. and that's hours from civility. to keep the war stable and predictable. and that is not only crimea or not on the situation on the east, but this is maintaining of obligation with a little bit of frustration to the russian president. >> do you believe what you said about russian aggressions, we need a third order of round-about to bring about a dialogue with russia. would you believe the conditions are lrp in place where the diamond takes place. >> the sanction is the methods,

not a purpose. i hate that this could be powerful for the epgish person. how to put everything on the table, how to discuss and change the position. if any country violates international law, if any kind may drink into the independent country. we should coordinate it. and all the organization retail -- this is the united nations and the security council. they dmon straight ahead that russia is in a different place. because of crimea, russia and the rest. we should stop that and not be so emotional. we should have stopped to replace and return to stay in

school. >> so what or who is the beggest obstacle but you, for you in the ukraine? >> nothing can stop us. >> that was the president-elect speaking to cnbc last night. there are issues and mr. lavrov, the russian foreign minister, is pointing out that the election was not without issues as well. clearly, we know up habitants in the both cases are 15%. those residents are then able to vote in the ream. a region of 3.3% million people. a huge company of people, 36,000 in total, wow! the fact that a percentage of

the 10% who were prevented from voting were able to get there and that's extraordinary in itself. but the fact of the matter wants to know who was it. he'll waiting people -- whatever mr. lavrov has to say, i think he'll say this is a legitimate record and work with win knee the pool, the f. you know it is pretty good by western standards as well. thank you. >> standards, thank you. more of steve in the second half of the program. meanwhile, elections are here in europe. the buy right now results are

described as a political earthquake, but not everyone was upset about the results. here's the u.k. leader nigel ferrar and they are beginning to speak. and we formed our people's army and took out the accomplishment. michael is still with us. good morning to you. this vote is seen as basically widespread vote against austerity in the eu, is it against us aer the think. >> well, it's a damming condemnation of the status quo. across europe, we have seen parties on both sides of the political spectrum rally together to do really well in the elections. the danish people's party.

and those with grease. meanwhile they are not immune to the vote. f . /* her map date is to break up the euro falling to 7%. >> but one would presume those are the anti vote or the ones most likely to vote. >> exactly. that's showing some of the problems consistent in europe. over the years voter turnout in your your peeuropean markets. why now more than ever the eu needs to embrace reform, too. >> what sort of reform? >> it needs to become more democratic, slim down and focus on tray and competitiveness. and focus on the big questions

of the eu such as negotiating and not regulating the size of your toilet flush. >> how is this going to play for investors? >> if you get the good thing, that's great. if you don't -- >> i think this is a historic historical -- this could mean a little more growth in europe. a little more relaxed with the ecb. so that's been an niche sort of major reaction. i think it is difficult, however, to look beyond the big 4 in the injury row zone. if you had a party doing really well in italy and spain alongside france, then they will eject anything that comes from france to have a prolong ed loo at the picture in other

countries. also, the eu didn't do well in the netherlands. the u.k. is a separate story as far as the eurozone is concerned. it's an up usual story but a separate story. for that reason, it will get a pro-growth feeling in the markets but that's not going to translate. >> is this because germany is going to deflect what france wants to do? >> i think it will be interesting. hopefully this is a wake-up call for leaders to pursue a more practical move. we'll see what happens over the next few days. >> you said we'll watch the integration from the european parliament. >> because of this anti-communist parties but the anti-immigration parties across the spectrum are pulling into the new european arm right.

75% of the time they vote together and are accurate. more arrests for this agenda, which is a great army. there we go. that's the way it works. nena, thank you for coming in. michael sticks around. now these in the european central bank's event septra is speaking to the president. topside lines of the conference he's reacting to the european election results. >> in my mind they are not surprising, but it's a clear message. it's an assignment really for us to deliver more results in the next couple of years. in terms of more growth, more jobs, people are becoming inpatient. and in many countries it's

understandable. >> we'll bring you comments from the eu reforms as to whether they are too harsh. and still to come, thailand's xhep tear dress, what is the latest from bangkok?

we have more comments coming from the russian foreign minister lavrov post ukrainian elections. he hopes to do everything to prevent the extremists from invading ukraine. and he's warning them not to step up special operations against the rebellion in the east. lavrov says russia is ready for dialogue with parashenko. more on that to come. meanwhile, sony is entering the games console market in china with two local ventures with a local company to produce and sell playstations. we have more now from tokyo. hi, makiko. >> hi, ross. sony's move follows the lifting of china's 14-year-old ban on selling game consoles in the country in january. the government has allowed foreign firms to sell games only if they operate within the free trade zone in shanghai.

sony will partner to run and create two ventures in the eurozone. one is responsible for the hardware and the other on software. in sony's latest market comes as the firm trying to turn around after suffering its fifth annual loss in six years. and following the report, sony shares jumped 4.5% during the trading day. microsoft already made moves to enter the promising market and the focus is now on whether nintendo will also follow suit. that's all from the nikkei business report. back to you, ross. the bank of japan today where one member of the board talked about the risks to the downside. that should have been the final communication. how significant is that trading? >> i think this cat and mouse game all year that the markets originally thought for the bank of japan would need for the sales tax empire in april then got pushed back to july. now it's being pushed back to --

>> after strong comments last week. >> indeed. and that pushed it back. so the market looks at the comments being the most important. the fact that there is an active debate, i think that will sort of grow as you get later in the year. and some of the underlying sort of pickup in cpi isn't necessarily there. quite a bit of it has been driven by the weekend. and the yen has stopped weakening this year. so that will be sort of and initial, i think, once you look at the underlying figures. >> right. china meanwhile said they have enterprises to seven links with american firms. this is according to a report in the financial times. the firm targets makenzie and a boston firm. this comes after washington's charged five chinese military officers with spying on american

companies. beijing has also warned the u.s. it would retaliate. and former thai president is on house arrest. this is his first mill grar group since on power. his leader says he's been endorsed by the country's king. and will need a military council to run the building to elections are being held. in the meantime, nintendo will use force if political protests flared up again. then indochina bureau chief is here, how far away does it put the prospect of any timetable for the elections? >> reporter: it is very significant because it has strengthened and he has not laid down a timetable. he certainly shook the results

but they must be reform-plus. in connection with this year, it's gotten overrun. suddenly i am a hand to coc right now. >> yeah. this comment is going to deal very firmly. i am anticipating a lot of military presence against the coup. >> right now they are an extremely small number. this is an number. and this thing is technically there in violence of marshall law to ban guys firing five or more people. that could be kind of control. we cannot let them get bigger. >> he is now out of prison and on house arrest, as i

understand. so what all can the leaders of the political party sang at that moment? >> reporter: they are not saying anything at all, because the 200 people have been called in. and it's very cop fusing. and we know a lot of them have been detained seven days without charge. and even is on silent. not many of the officers are saying anything, only because they don't want him from saying something. >> in some cases, yes. they understand the attention. and in some cases, they are too scared to say anything. >> how much is the military in control of the media there? >> um, i am was in total career. they have soldiers in the premesis. and then they have multiple

bodies on television stains remaining complete okay. and according to the latest cbo council, we spoke to a panel of three cfos earlier today and this is what they had to say. >> for us, it has been a very solid market and a tempting market, so we picked up some $10 bill last year in debt. at fantastic rates. so we see the liquidity situation to be very strong. >> liquidity for her girl parts i we see also the tighter spreads so there's no issue for companies like this.

>> there is a lot of liquidity in the system, and i do think that we are seeing a very attractive coupon. he recently issued a euro bond at a 2.5% coupon, so the markets are quite good for companies. >> log on to the cfo council website to get the full analysis of the results. and no surprise, we know big companies have access to cheap credit. for a while, michael, let's get your views here on what we have priced it as the fed stops tapering and rates go up sometime in the next year. what are the risks of the forecast? >> the risks are that the economy in the u.s. turned out to be somewhat better than expected and is given the tiny global markets that the fed bring forward then their tight anything. the market has a very relaxed view and knows that tapering is going to end in november, but we

are not going to see the first tight anything until next year. so the reason that you have seen carry trades in emerging markets and the reason that you're seeing ongoing money continue to go into the periphery is that people think the remainder of 2014 there isn't going to be central bank tightening and they won't take liquidity away. and as you sort of -- >> the longer data maturity yields, they are telling us they won't go far, and the growth analyst is pretty week. is that how you should read yields on treasury at 2.5%? >> not necessarily. they are showing the fed to spend quite some time before they start. if it is brought forward, it will have an impact across the curve and will impact the global markets. for now, i think the only big

speed bump is potentially china. we know that there's a slow down there. we still think the markets underestimated the slowdown and that can have a risk on the global impact of the summer. >> so when it is down to march lows, you think there's a risk on that? >> there's a bit too much complacency in the market. just on the search for yield or search for risk, i think the market is going to have a rethink on china. >> thank you for joining us from idea global. we'll take the second hour of "worldwide exchange." can ukraine's billionaire president usher in a new era for the nation? ♪ i always wanted to design a bike that honored those who serve our country. and geico gave me that opportunity. now naturally, we wanted it to be powerful,

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you're watching "worldwide exchange." i'm ross westgate with headlines around the world. an election boosts a stock rally on the back of prime minister renzi's surprising victory in the european elections with stark contrast to france where the result is being dubbed a political earthquake. and armed men seize the airport in danet shortly after the polls close in ukraine despite vows by the president-elect parashenko to bring peace. >> we will stop the war. nobody and nothing can stop us. and thailand's king endorses

the country's military chief despite growing protest against the army and the round-up of activists since. plus, availability of credit in europe and asia is strong according to the latest cnbc global cfo capsule. speaking of they are gaping access to capital at attractive rates. >> it has been a solid market and tempting market. we picked up $10 million in debt last year at fantastic rates. >> you're watching "worldwide exchange" bringing you business news from around the globe. we are two hours into the trading day in europe. without the u.k. on a bank holiday, and without the u.s. with a day off trach. without that, the focus is very much on the results of the

european election with comments from mario drugge. the leg up is france after a very poor showing for francois holla hollande. the ftse is doing well with stronger than expected results in italy. up 2.5%. and the micex in russia is up 2.3%. the left party triumphing in elections today. and they completed the 500 euro rights on friday helping it out. and the pirelli is doing great striking an agreement to open over 200 retail outlets.

the two companies also agreed over rubber production. the german government says it will hold on to its stake in the german lender until at least 2016 in hopes it will give a more favorable price for the stock. this all according to the spiegel with berlin taking a cut during the financial crisis. and the spanish energy company repsol up 1.5% today to look to get board approval to distribute 1.3 billion shareholders in the form of a dividend. this is according to reports with them holding their monthly meeting on wednesday. so how does that playout to peripheral yields? remember, we were down on the lows since the formation of the euro. very much up after seeing yields up to 3.2 over the last few

weeks. back down to that level helped with the election results. the yield in france is high er yielding 1.24%. the currency markets, the euro/dollar is down. we have been down to 1.3615. mario drugge is coming out to say if this continues it would be appropriate to look at asset-backed purchases. they are looking to say we are aware. and the dollar/yen, 1.02 near 3.5 month lows last wednesday. one member from the board of the bank of japan is saying there are risks to the downside of the bank of japan's forecasts, so not a completely anonymous view. so that's where we stand right now in europe. what about the session in asia n

particular in relation to the latest news coming out of thailand? sri? >> thank you, ross. yes, it's not looking good because as we heard earlier, the military does look to be consolidating its grip on power. and a step forward in that direction is the fact that the country's revered monarch, the king has formally endorsed the general as the head of the ruling military council. we did see the market drop by as much as almost 1% on a foreign selling, especially in the large caps, but the market seems to be recouping some of those losses. still in negative territory, but we are not as bad as we were earlier on in the session. let me remind you, that has been the kind of rinse and repeat pattern that we've seen in the thai equity markets. time and time again we have had major political developments. we have seen a big overreaction

by the foreign investors. a lot of selling on their behalf only for the local investors to put that back into the market and push it back up. so it always tends to gape a degree of composure. we'll see if we see further consolidation in the market. elsewhere, bombay sensex is giving back some of the gapes we saw earlier. the prime minister is going to be sworn in today. and a big test of fiscal discipline is going to be the budget toward the end of june and early july. elsewhere, you talked about the weakness in the japanese yen. that's helping the exporters. we have also seen some buying of the financials as well helping to push the nikkei up. back to you now, ross. thank you very much for that, sri. that's the latest out of asia.

russia has said this morning that it is ready for dialogue with the president-elect of the ukraine petroshenko, but they warned kiev officials not to step up against the separatists in the east. mr. lavrov, the foreign minister, sent general dialogue to the east. and that was the key to resolving ukraine's crisis. steve is in kiev post-election results. what's the position of the russian prime minister echoing comments from president putin last week, steve, and what was the response there? >> reporter: very interesting. i have heard those comments and have read them and read them again. if you look at it from one point of view, he's right. we don't want any form of extremism in the world let alone here in such a difficult environment. ukraine is both here and in kiev

a and, but he's saying he wants to combat extremism and is telling the country not to move separatists. what the foreign minister said to me he calls terrorists. and men are wearing camouflaging. then perhaps the government would say they are extremists as well. so perhaps there's a contradiction in those statements as well. we have seen within the last couple of hours those separatists, as mr. lavrov would call them terrorists, they have taken control of the airport. and that's not just symbolic. it's because mr. parashenko, the president-elect, said his first job would be to go to speak to the people there because so many of them, only a maximum of 15%, were able to vote in the election. that's the point that mr. lavrov said, it was not without problems, but it's an overwhelming mandate of which 33 million out of 36 million people

were able to vote without problems. and in a first round that had over 20 names on the ballot sheet, to get 56% to 57% depending on which opinion poll you look at, that's quite an extraordinary achievement. anyway, the dialogue will go on and the process of peace-making will go on as well. we spoke to the foreign minister about these problems, about problems in the east and about dialogue with russia. let's listen in. >> we do expect that russia will recognize the outcome of the elections as they promised to do during the putin speech last week. >> you want de-escalation and peace, that's what everyone says, whether they are on the russian side, speaking to members of the putin state government and here in kiev. but there are many in kiev that want extra sanctions to push the russians to the table. there's a fear that it will actually escalate the problem.

>> let's keep this pressure ongoing until we deescalate the situation. >> do we need a third round of sanctions? >> i think we need to pressure. it will depend on the russian reactions in the few days, in the nearest days. >> one of the major barriers for russia and kiev speaking was the legitimacy of the government. they said it was an illegal ousting of yanukovych in late february. now we appear to have put the legitimacy issue aside with an overwhelming post for parashenko. we need to start bilaterally. he expects a replacement for the 1994 budapest memorandum as well. they are looking to see if sanctions are needed to get the two sides together or not.

there are many who want a third round of sanctions, but others are saying that will only make the problem worse. what happens in the next few days is absolutely key to the peace process. back to you, ross. >> steve, thanks for that. more to come from kiev. you can get the latest as well on cnbc.com. joining us for the next part of the program today, the chief economist at saxso bank. events around ukraine and russia have caused over the first quarter and it caused a risk with the dow off fresh record highs. now that we have this election ape parashenko has a majority, which means we have no runoff, how will investors view it? >> they will still see the glass as half full as long as things are not escalating, they think it is good news for the market as we claim to see this morning in the european markets and

certainly in germany. so for them it is still about waiting for the ultimate resolution to this conflict. i don't see on my personal level any news in terms of this. i think the situation is probably slightly diffused from the fact that you and i have a precedent with real majority, not just one given. russia will still claim it's not legitimate. and we have to look at what is coming out of russia. i have not seen yet that they have actually said he is dually selected as president. they will still say that they acknowledge that there was a vote and he won it. and legitimacy so, but you saw that in lavrov's speech as well. the market is still half full, unfortunately. >> you say up fortunately which suggests that you think the market's got it wrong. and you mentioned germany's dax up a record high. obviously the ukraine crisis intensifies and germany would be hit the most.

but you are bearish on the germany economy, why? >> it is more due to the global macro picture. i featured that the slow down that is happening with the rebalance of asia will have a material impact on germany exports throughout the second half of the year. you have seen this trend already in the export numbers and the volumes going on. so germany's certainly becoming less competitive and seeing less volume being exported. so i'm very concerned of that. if you then add to the equation the fact that russia remains a political risk. the fact that energy policy in germany is probably the worst executed policy anywhere in the world. moving away from nuclear power to be dependent on russian gas is not exactly the cause that would be taught in most business schools for the next 25 years. so i think germany has made themselves very dependent on what goes on in russia so that when we add to the leverage in terms of the potential downside, but overall i'm concerned about germany because they were the

biggest beneficiary off the expansion in capital goods in asia during the crisis. >> although the pmi is briefly going up. >> pmi, ross, is a survey. it's a good tool but nothing to do with the reality of the underlying economing trends. if you look at sentiment, if you look at all of the data, certainly the export, everyone agrees that germany is an export-leading economy. and those numbers are coming out quite nicely related to growth coming down. >> we'll see what this means for strategy. we believe what you say. i know you believe what you say. steve, thank you for joining us. still to come, tremors are sent throughout the union, but how groundbreaking is the anti-eu win? we'll get into that. we needed 30 new hires for our call center.

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recap of the headlines, equities rise as the pro-eu parties pick up a majority of the seats in the parliamentary vote. and poroshenko wins the

presidency. and the thai coup is capable of running the country and warn predators of returning. the u.s. skeptic party has won 27.5% of the vote in britain and the leader called it the most extraordinary result in 100 years. at a press conference, he talked about his party's success. >> i think the whole party is beginning to speak. and we formed our people's army to fight the establishment and it looks like we'll have a victory. meanwhile, the far right national party took the top spot in france's eu election. stephane is in paris with reaction. quite strong comments from the french prime minister, stephane. >> he promised lower salaries

for the middle class people in france. that's one of the reasons that the extreme right party came first in this election. it was anger after years of tax rises, and that seems to be in line with what's in our recent strategy. 38% of voters in france wanted first to express their opposition to the socialist government. and that is even 67% for those who voted for the extreme right party national front of the election. only 25% of people who choose the party did so only because of european issues. still the leader of the national party confirmed yesterday the opposition to europe. and the reason why she believes people voted for her. >> translator: our people demand one policy only. a policy of the french for the french and with the french.

they no longer want to be led from the outside, bending to laws they have not voted for and obeying the commissioner who has not been elected by universal suffrage. >> yesterday she called for disillusion of the french national assembly which she claims doesn't reflect the political landscape in the country. remember, this is the second blow for the socialist party in less than two months in march at the local elections. the social party lost to the control of 150 cities in france while the extreme right party is under the control of a city that was already the biggest victory for this type of election. >> thank you very much for that. meanwhile, exit polls from italy show mateo renzi pulling ahead of the five-star movement. so how significant is that? claudia has the details for us.

claudia? >> well, this victory is very significant mostly because it was expected but it is the size of this victory that is what is affecting our markets here today. and in general will be talked about over the next few days. the gap between the five-star movement was expected to be somewhere between three, seven or eight points. but it ended up being 20 points. for pelagrino, he takes after getting 25% of the vote at the last national elections. and after in the last weeks expecting to be able to get enough support behind him to actually beat the pd. so clearly this is the biggest

victory for the pd and it is renzi's first exposure to national elections. so certainly he's legitimized to move forward on the many issues that are economic. we are seeing the spread declining here at 158 points. we are seeing a market boosting the banks on that lower spread. and equities in general benefiting from the idea that we'll get a more stable italy going forward. so you're seeing this market certainly taking off hire. ross? >> claudia, thank you very much. still to come, a load of expectations being baked into the next ecb meeting in june. will mario draghi have more to say? we'll get there after this. ♪fame, makes a man take things over♪ ♪fame, lets him loose, hard to swallow♪ ♪fame, puts you there where things are hollow♪

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mario draghi has been telling the european central bank in portugal today that the bank is ready to act on the stress of european countries. we are joined now with more. annetta keeps talking about dis disinflation if it continues to happen, what will his response be? >> he's saying in his speech that they are looking at three different areas. one of them is, of course, the strong euro exchange rate. and another one is that credit is not flowing to the real

economy and that there might be evidence that there is not enough credit around to actually get the recovery going. and that the two main areas are what mario draghi and his team are looking at. we are looking to get an interest rate cut next week and also measures like the target for the banking scene. but for now this is, of course, pure speculation, but a lot of analysts are thinking that this could happen. there's a beautiful meeting here, and i also called up the head of the euro group and asked him whether those results of the european elections are also a sign that we have to get less tough on economic reform policies in the euro zone. take a listen of what he had to say. >> actually, i think the design of the reforms can be more clever, but we have to push forward to reform the agenda to

become more competitive if we want growth and we need growth for jobs, then we have to become more competitive and this goes for almost all the countries in europe. >> looking at the debt clause in europe, nothing really has changed. is there a lot of concerns around a link between debt and political instability? >> a lot of fear has changed over the last two years. the markets were very up stable. trust has returned to the euro zone. growth is picking up. in almost all the countries growth has returned, but we need a stronger growth to get the jobs back. and we will over the next couple of years. and the debt issue will gradually be resolved. but it's a big issue. there are no easy solutions. it will have to be resolved over time. coming out of this crisis we have major debts in europe, households of debts and

governments have debts, so that's another reason why we need stronger growth and need measures to pick that growth up. >> you're at that conference, all eyes on the ecb because they are inviting, and also on next week's meeting. would you be happy as a policymaker to see them ease their monetary policies there? >> i believe strongly on the dependence of the ecb, so we'll see what this will bring. >> so the european central bank is convening here behind me in that building. and they are discussing about a main point of up inflation and what should be next on the agenda of the ecb. one point is how to measure inflation and how -- what should be the inflation target of the central bank. so it's economist that is are arguing there should be a 4% target with the threshhold of

falling into an inflationary volume. but there's a lot of policymakers around him on trying to catch up with some of him. thank you. for now, the bank of japan revealed an ascension in prices. we'll look at that when we come back.

you're watching "worldwide exchange." headlines from around the globe, stocks in italy rally on the back of the surprising victory win in elections. this is in stark contrast to france where the result is dubbed a political earthquake. president-elect poroshenko is looking into the anti-terror movement in the east. and he is warning to step up action. and thailand's king endorses the military chief despite growing protest against the army. and the round-up of activists since the coup detar. and credit in europe and asia is strong according to the latest cnbc global cfo council. speaking earlier on cnbc, they said corporates are gaining access to capital at attractive rates. >> it has been a very solid

market and a tempting market. so we picked up some $10 billion in debt last year at fantastic rates. >> you're watching "worldwide exchange." bringing you business news from around the globe. we're getting more comments out from the president-elect of the ukraine, poroshenko. he says they need to be more effective. he says stability in eastern ukraine is not possible without russian participation. and therefore the first meeting with russian leadership should take place in the first half of june. steve has also been speaking to mr. poroshenko this morning and is rejoining us from kiev. steve? >> reporter: let's look at the time line here as well, ross. what we have avoided is the wait for a second polling, a playoff between the two top candidates

which would have been timeshenko and poroshenko. that would have been destabilizing for the country, but he does not get inaugurated until after the 8th of june. so although he wants to start the dialogue with his opposite number in the kremlin, mr. putin, that's not going to be possible until after the 10th of june at the earliest. and, of course, then we have to keep the timeline on track that he's talking about in the first half of june as well, but it is very interesting the interpretation. lavrov says do not carry on this operation with separatists, but he's saying not to carry this on with terrorists as well. a meeting of the minds is still to come. and the question is people believe more sanctions against the russians are warranted at this stage or whether the two parties can come to the table. the sanctions are a thorny issue for both sides, especially for europe. and i spoke to mr. poroshenko

about needing more sanctions or not. let's listen in. >> the sanction is the method, not a purpose. i hate the idea that it would be painful for russian people in a sanction. the way a sanction is just the reason how to put everything on the table. how to discuss and how to exchange the position. any country violates international law, if any time you don't recognize the territorial integrity and severity of the i would pep dnd country, we should have it in the organization in the council here in the united nations and the security council of the united nations demonstrate that russia is in complete isolation because of crimea. and russia, ukraine and the global economy pay a huge price for the crimea and we should

stop that. we should not be so emotional. >> that's poroshenko, the president-elect speaking to cnbc. that's his first one-on-one since gaining the vote. very interesting, the only reason many people say he got over the 50% line is because the second most popular candidate pulled out of the presidential election and decided to go for the kiev election. that gentleman was a former boxer. he did get control of the kiev mayor position and will be taking that one up immediately. and of course this is a town that has so much potential but so much corruption as well. he's got a lot on his plate as well, so let's listen in to see what he said to us last night. >> there's huge support right now, and we see more than 50% of ukrainian people support poroshenko.

it's a huge expectation from society and we have to make reform. we have so much time. we work as one team. and it's very important to show the team spirit. it's our main challenge, to destroy corruption, to bring the rule of war, and to our country and bring our country to european union. because we are european geographically and bring the standard of life wherever. >> how does ukraine speak to russia? the language is still pretty angry. how do we lessen tensions? >> yes, of course. what's happened the last couple of months, the relationship between russia and ukraine is not the best.

we have to start to discuss. we have to start to talk. it's always better to find points where we can find compromise of something. it is always better to speak to resolve. and the main point of the dialogue is the biggest thing in our country. but what happens in eastern ukraine, today we have legitimate power and a legitimate president of ukraine and a huge responsibility. and right now huge expectations for everyone. and we need peace fful country. country resolve war. >> you heard from poroshenko,

external issues, separatist issues, dialogue with russia, et cetera. but look at the economic stats for the country that are absolutely appalling on a par with the worst i've seen in southern europe. 5% contraction of gdp. double-digit inflation. the currency is down about 25% so far this year. nearly $35 billion in financing over the next couple of years as well. the problems in this country are on france. it will take an extraordinary effort on the prime minister and the mayor of kiev to turn this country around. that's regardless of the other geopolitical issues. it's a mighty task. >> it certainly is. we'll follow it with plenty more on cnbc.com. for now, that's the latest from kiev. it looks like there's some dissension at the bank of japan. one member thinks the central bank should change its assessment of prices because risks are tilted to the downside.

the proposal was rejected with the bank of japan maintaining its stance on prices finally being balanced. the nikkei closed higher today following minutes. the dollar/yen is under 102 after being down at three-and-a-half month lows at 180 last wednesday. the visibility of the 2% target is not dependent on the yen but a rise in the currency could have an adverse impact on demand. joining us is camilla at goshen bank. and steve is still with us patiently waiting. camilla, let's come to you, first of all. what are your forecasts for dollar/yen? we have been swinging around 100 to 105. when it breaks out of that range, which way does it go? >> well, we would expect dollar/yen to move higher so we have a year-end forecast of 109. and really the fundamentals this week the combination of the meeting and cpi later this week likely to continue to show us

that even though inflation moved well off the lows, we are a long, long way from the target. and we are still likely to see the bank of japan become aggressive in the months ahead. >> you think, the bank of japan is cornered, steve, what do you mean? >> the mere fact that they can't create inflation. and when you have all demographics, you have no movement in the labor market and have been saving nations, the last thing you want is high inflation. and that will play into why i think dollar/yen is going lower first before it goes higher. because i think japan is in a situation where they are now on the current account deficit meaning they have to recap some of the savings they have had over the last few decades. >> you said going lower, what sort of targets and then going higher? just explain that. >> i think the inability of the bank of japan to follow through on this policy because of more qe i don't think will be taken too positive in the market.

it doesn't have any bearing in terms of the economic growth and certainly not in the inflation expectations. so i think the dollar/yen is mainly driven by funds from overseas. and the fact that we don't get the substitution from fixed income to equity. and you have to remember japan equity is almost entirely owned by japanese investors that remain almost exclusively invested in the bond market. so ask the foreign investor, they will come down and that will probably create the final test for the bank of japan. what do they do if dollar/yen trades at 195 and 193 again? >> camilla? >> well, it's hard to know if you are talking about the very near term. we have seen dollar/yen stuck in this range testing the lower end of the range last week and failed to break through it. now we are back in the mid-range, but all in all in the near term, what we are likely to see is we have this complication on cpi coming from the consumption tax. what we have is lower growth dynamics. we have a bank of japan telling us no matter what cpi is this

week, you have to take off 2.7%. we are in a faze where things could be moving in the right direction, but then what we end up getting to is by year end it's an environment where we really need more aggressive policy. and that's an environment where once again we start to see dollar/yen move higher because really for the bank of japan it's one of the key components that they really need to happen. and i think that, yes, we probably have leeway before that occurs, but still by year-end we are likely to see another leg higher in dollar/yen. >> and very briefly, euro/dollar, we have more conflict out of the ecb today with mary brugge, what is your target from the ecb? >> it gets very interesting. here we sit with mario draghi highlighting the qe will be used if not only inflation expectations fall, but also if we have inflation too low for too long. and i think most of us could probably argue that we're in

that space. but i think it's likely too early for that, so again in june, the market is very well prepared already from what we are likely to see is essentially maybe credit easing. but we are likely to see it come on the interest side. and for euro, a lot of that is priced in. the key for euro is looking up flows. we are finally not short on euro, so i think that position is key and the bond yields in the periphery, today we see them lower and we need to see them bottom out before we are likely to see the euro move lower because this year has been a story all about flows for euro. >> okay. camilla, thank you for that. steve, stick around. we'll come back to you for some more thoughts as well. european equities are up as we go through today's session. the u.k. market is closed. more to come on "worldwide exchange." we needed 30 new hires for our call center.

i'm spending too much time hiring

and not enough time in my kitchen. [ female announcer ] need to hire fast? go to ziprecruiter.com and post your job to over 30 of the web's leading job boards with a single click; then simply select the best candidates from one easy to review list. you put up one post and the next day you have all these candidates. makes my job a lot easier. [ female announcer ] over 100,000 businesses have already used zip recruiter and now you can use zip recruiter for free at a special site for tv viewers; go to ziprecruiter.com/offer2. all right. a very strong performance for the prime minister renzi. the ftse is currently up 2.5%. and italian yields after spiking over the course of the last few weeks getting back down to the 3% level on the ten-year. steve is still with us, what do

you make of peripheral yields. and in general, the direction of the bond yields traveling? u.s. bonds are still down on the lows around 2.55%, but we are not far away from the six-month lows as well. what do these bond markets tell us? >> they are telling them that the story we were told earlier in the year that we would have growth and recovery is not a real story. the bond market has voted with its feet and we are at a much lower rate. and the interesting segment is the first derivative lower rate. the crisis in ukraine, the ecb's action, the boj and certainly in my opinion the main result out of the eu election is that we'll have less growth, less reform and more gray sort of environment for policy decision. and certainly there's a lot of center right and center left qualities to refine the european strategy. all of which these two at best

slow down recovery, but the bond market is very clearly telling us that recovery is not in full swing. it is interesting in a count industry like italy, you draw domestic conclusion on what is a european election. it's so true that this hope is what drives everything right now. the way forward for reforms is going to be very hot, even for renzi getting a european parliamentary vote at 40%. >> people say new growth, we need new growth agenda and you think more of that result is in the eu being the answer. you're pessimistic that even with france they will be pressuring germany to get a reform going. you don't think that will work? >> if you think about the construct of europe, it is that we have to have certain monetary policy gold tending in terms of

deficit. if france is successful in getting an agenda of growth and lower taxes, which i'm fully for, it relieves a gap in terms of the revenue. and the same goes for italy and europe. either europe needs to step back and not open force the rules to a two-pack or six-pack. if you do that, you are diluting it as a whole. if on the other hand you andize risk and take much longer and much lower bond yield, i think that the only asset cut that will do well for this year remains european bonds overall. and will also argue that everyone buys the bonds, so you will be forced to buy the peripheral. that's the irony. not helping italy but getting rates so low we are forcing the fund managers and investors to buy the periphery will be the solution to how to get lowest interest rate in europe.

>> good call, steve. thank you very much. good to see you today. thank you for patience earlier. i hope you got a cup of coffee. now, still to come, 26 years of glory from magic came to an end. what does that mean in terms of brand value?

real madrid won the champions league this weekend. their tenth victory in the champions of europe's final. the financial value of the grant has been hit hard by its poor on-field season. this is according to a new

report. they claim their brand is now worth $79 million, now down over $100 million from last year. robert hague is the communications director and is joining us now. your city left the red devils feeling blue. just explain how you're calculating the value of the brand and the impact of the season. >> the grand value is calculated through a mixture of pure brand related fixtures. so for a football club, it would be on-pitch performance and the affection for the fans and their club and the metrics like that. and also revenue. so it's a combination of the two. >> so when you break down sort of the incomes, the commercial, one you can live with, but if they have a poor season next year, will those income streams start to be impacted?

>> yes, that's exactly the position that our brand is in. so they have the contingency for the season they have had. once it is an impact, it is not as severe as expected because of the commercial partnerships in place. but if they go another season finishing seventh or lower, things start to go haywire for them. >> there's a gap between now and barcelona, so they could have waited for the brand to drop there in barcelona. >> it's crew because barcelona had a difficult season themselves this year. so it could be that barcelona had a good season next year and then had a terrible season and would take that short amount of time for them to slip again. >> the top spot at the moment, what is interesting is they got thumped by real madrid. they just picked up the tenth european cup, which they have been looking at for so long, what does that do, do you think,

for the value of that property? >> are they going to regain some global momentum? >> definitely. real really picked up in value in part thanks to their success in the champions league this year, but the spanish economy there also benefited them. and that's something that has been benefiting them for a long time on the strength of the jer man economy and the model of the league. >> and finally, letico didn't win but a lot more would be knowing of them. >> they were twice as high as last year. and although they didn't win, they really have announced themselves on the european stage for next year. >> thank you for tuning in. robert haag from brand nns. that's it. "closing bell" is up later. hope you have a good day.

♪ ♪fame, makes a man take things over♪ ♪fame, lets him loose, hard to swallow♪ ♪fame, puts you there where things are hollow♪ the evolution of luxury continues. the next generation 2015 escalade.

>> tonight on the profit... i go inside sweet pete's, a confectionary shop whose candy-obsessed owner has created a huge variety of sweets. >> that's the caramel. >> that is good. but with a horrible location... part of location is having foot traffic. and i don't see that here. a partnership gone bad... >> i'm calling you out on your integrity. it's crap. >> and an outdated kitchen that won't allow him to keep up with demand... there is a limit to the output, and you're the limit. if i can't turn this business around... >> i don't see how i can go forward. >> sweet pete's will come to a bitter end. >> you guys misrepresent my integrity. >> no, i'm calling you out on-- >> i'm sorry. >> my name is marcus lemonis, and i fix failing businesses. >> we made $10,000 together. >> i make tough decisions... we'll change the recipes. >> i mean, that would be the last thing i'd want to do.